Different types of leather are seen at the Rio of Mercedes cowboy boot factory, on July 31, 2025, in Mercedes, Texas. Ronaldo Schemidt | AFP | Getty Images

Bootmaker Twisted X — known for its Western footwear — was thrown into chaos overnight when President Donald Trump imposed sweeping tariffs on imports in April. The company turned a conference room at its Decatur, Texas, headquarters into a "tariff war room" as import costs on its finished work boots surged, shipments were paused mid-transit and invoices fluctuated so wildly that staff found themselves recalculating margins by the hour. "A lot of other leather companies had to pause shipments because of the chaos and it felt like prices were going all over the place before you could take account," Twisted X CEO Prasad Reddy told CNBC. "It was a very uncertain time." Twisted X wasn't alone. Leather retailers big and small are facing similar challenges, and the result has been higher prices at the register that are unlikely to come down anytime soon. Pre-tariff inventory is gone, while replacement orders cost far more. The products hitting shelves now were manufactured with more expensive hides, subjected to pricier foreign processing and shipped with higher freight costs than last year's merchandise, industry experts said. The Yale Budget Lab projects that leather goods prices will remain elevated by nearly 22% for at least the next one to two years, driven by inflation, supply chain bottlenecks and heavy tariff exposure, particularly across China, Vietnam, Italy and India. "The reason why leather is hit so hard is twofold," said John Ricco with the budget lab. "No. 1, some of these tariff rates that are the highest are placed on different countries where we import most leather. The second reason is that we just import a lot of leather, and, more broadly, apparel-related products from these trading partners than we make." The costs have already shown up for brands like Tapestry , owner of handbag makers Coach and Kate Spade. Executives told investors in August that tariff-related expenses could total $160 million, warning of "greater than previously expected profit headwinds" moving forward.

Chasing low costs

A pair of Twisted X boots starts the way most U.S. leather goods do: as a raw, salted cow hide from an American ranch. That hide is shipped overseas, usually to Asia, to be tanned into leather. For Twisted X, roughly half of its products are tanned in China, down from 90% in 2017, Reddy said. Once turned into leather, the material typically is shipped to another factory — often in China, Vietnam, Mexico or India — to be cut, stitched and assembled, before finally returning to the U.S. as a finished product. Under normal conditions, that global supply chain kept costs low. But reliance on foreign production backfired when the new duties took effect, Reddy said. "When tariffs happened, everything stopped," said Kerry Brozyna, president of the Leather and Hide Council of America. "So they [China] couldn't take shipments in because if they took them in and they computed in the price of the tariff, they wouldn't be able to sell them." Currently, the U.S. leather trade deficit is one of the widest in manufacturing. In 2023, the U.S. imported $1.37 billion in leather apparel while exporting just $92.7 million, a roughly 15-to-1 deficit, according to the Census Bureau. China alone supplies about one-third of all leather goods imported into the U.S. "Being so reliant on many overseas productions methods ended up hurting many people in the industry in the beginning when they didn't know exactly what was going to happen," Reddy said. "At Twisted X, we have been working for a while to reduce reliance on China." As the duties took effect, Twisted X and many other leather companies rushed to exit China and encountered new problems: bottlenecks in Cambodia and Bangladesh, longer lead times in Vietnam, and a sudden 50% tariff on many Indian leather exports imposed in August. By late summer, nearly every leather company was paying more at every stage — for hides, tanning, assembly and re-importation, according to Reddy. "We saw all our channels to make boots keep getting more expensive until we were able to figure out a good solution," Reddy said. Conglomerates like Steve Madden are also feeling the impacts. "The third quarter was challenging, driven largely by the impact of new tariffs on goods imported into the United States," Edward Rosenfeld, chairman and CEO of Steve Madden, said on an earnings call in November.

Price increases

Many companies absorbed what they could, but that buffer is fading, Ricco said. Despite rerouting supply chains and moving production, Twisted X said it still had to raise prices around 1% to 3% this year. "We look at it as a success," Twisted X's chief marketing officer, Tricia Mahoney, told CNBC. "Many competitors were looking at bigger increases and but we made sure to prioritize our customers and keep the prices as stable as possible. Next year could be tough but we are more prepared than ever." Already, leather luxury prices are up. Chanel's iconic Classic Flap bag is about 5% more expensive than it was last year, after yet another round of price hikes this spring, according to luxury retail pricing data. But, by 2026, the leather industry's price shock will likely be more prominent, Ricco said. Analysts expect prices for leather footwear and accessories to rise roughly 22% over the next year or two and around 7% long term as higher tariffs, freight costs and scarce premium hides move through the system. "2026 is going to probably be where rubber meets the road," Ricco said. "They [leather companies] have to make these decisions about whether to pass cost increases on to consumers, whether to cut jobs and whether to reduce payments to shareholders."

Domestic declines

Workers at the Rio of Mercedes cowboy boot factory put the finishing touches on boots on July 31, 2025, in Mercedes, Texas. Ronaldo Schemidt | AFP | Getty Images

The decline of a once-booming domestic leather manufacturing industry is also reducing the options companies have to pivot away from the global supply chain. In the 1950s, manufacturers employed more than 300,000 people in roughly 1,000 tanneries nationwide, mainly spread across the Midwest and Northeast, according to the Leather and Hide Council of America. The workforce has fallen to around 50,000 in 2025, with the number of tanneries dwindling to a few hundred, per the council. Reddy said the so-called golden age of domestic manufacturing is long gone. The burden of tariffs has had the steepest impact on brands that rely on finished goods from Asia — not companies sourcing leather domestically. So far, rather than restoring U.S. manufacturing, as the Trump administration had predicated the tariffs on, many brands have responded by reshuffling suppliers overseas to contain costs, according to industry experts.

Women work in a leather factory in Kolkata, India, on November 25, 2025. Nurphoto | Nurphoto | Getty Images

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